XENETIC
BIOSCIENCE INC. 


EMPLOYMENT AGREEMENT


 


This
Employment Agreement
("Agreement"
) is entered
into as of this 1st day of
January 2017
by and
between Xenetic
Bioscience,
Inc.,
a Nevada corporation
with a principal place of business
in Lexington , Massachusetts
(the "Company"),
and Curtis
Lockshin,
an individual
(the " Executive").


 


WHEREAS,
the Company and
the Executive wish to set forth
the terms and conditions for the employment
of the Executive by the Company;


 


NOW
THEREFORE, in consideration of
the mutual covenants
and agreements contained herein, and other good and
valuable consideration
the receipt of which is
hereby acknowledged, the
parties mutually agree as follows:


 


Section
1. Term of Employment.


 


(a)           
General. The Company will
employ Executive, and
Executive will be employed by
the Company,
for
the period set
forth in Section
1(b), in
the positions set
forth
in Section 2,
and upon
the other
terms and conditions herein
provided commencing on January
1st, 2017 (the "Effective
Date").


 


(b)          
Term. The Agreement shall
become effective on the Effective
Date and shall continue unless
earlier terminated
as provided in Section 7
(the "Term").
The Executive's
employment
with the Company
shall be
"at
will,"
meaning
that the Executive's
employment may be terminated
by the Company or
the Executive at any time
and for
any reason provided that Executive may not
voluntarily terminate
his employment upon less than ninety
days prior written
notice delivered
to the Company,
or upon
such
shorter notices as
Company and Executive
agree.


 


(c)           
Location. During the Term,
the Executive's
principal place of employment
shall be
in Lexington, MA.
The Executive acknowledges that
Executive's duties and responsibilities shall
require
the Executive
to travel on
business
to the extent
reasonably necessary
to fully perform Executive
's
duties
and responsibilities hereunder.


 


Section
2. Duties and Exclusivity.


 


(a)          
During the Term, the Executive
(i) shall
serve as Chief Scientific Officer
of the Company, with responsibilities,
duties and
authority customary
for such position, subject
to direction by the Chief
Executive Officer of the
Company, (ii) shall
report directly to the Chief
Executive Officer; (iii)
shall devote all
the Executive'
s working time
and efforts to
the business and affairs of
the Company and
its subsidiaries;
and (iv)
agrees to observe and
comply with the Company's rules
and policies as adopted by the Company
from time to time. The Executive's
duties, responsibilities and
authority may include services
for one
or more subsidiaries of the Company.


 


(b)
      Notwithstanding
anything to
the contrary
in Section 2(a)
above, the
Executive may
(i) serve as a director
, trustee
or officer or otherwise
participate in not-for-profit educational, welfare,
social,
religious and
civic organizations.
During the
Term, Executive
shall not
accept any
other employment or consultancy
or serve on
the board of directors or similar body of
any entity unless such
position is
approved by the Chief
Executive Officer.




    	 	1	 



     


    

 


 


(c)          
Exclusivity. The Executive hereby
represents to the
Company that: (i) the execution
and delivery of this
Agreement
by the
Executive
and the
Company
and the performance
by the Executive of the
Executive's
duties hereunder do not and
shall not constitute
a breach of, conflict
with,
or otherwise contravene
or cause
a
default under,
the terms of any
other agreement or policy
to
which the
Executive is
a party
or
otherwise bound or
any
judgment,
order or
decree to which
the Executive is
subject; (ii)
that the Executive
has no information
(including, without
limitation, confidential information
and trade
secrets)
relating to any
other Person which
would prevent, or
be violated by,
the Executive entering into
this Agreement or carrying out
his duties
hereunder;
(iii)
the Executive is
not bound
by any agreement with
any previous employer or
other party
to refrain
from (A) competing with the
business of, or (B) soliciting
the customers of, that employer or party,
in each
case,
which
would be violated by
your
employment
with
the
Company; and (iv) the
Executive understands the Company
will rely upon
the accuracy
and truth of the representations
and warranties of the
Executive
set forth
herein
and
the Executive
consents to such reliance.


 


(d)          
Deemed Resignation.
Upon termination of Executive's employment for any reason,
Executive shall
be deemed
to have
resigned from all offices, if
any, then held with
the Company
or any of its subsidiaries,
and,
at the Company's request,
Executive shall execute such
documents as
are necessary
or desirable
to effectuate such  resignations.


 


Section
3. Compensation.


 


(a)           
Salary. In consideration
of all of the services rendered by
the Executive under
the terms
of
this Agreement, the Company shall
pay to the
Executive a base salary at the
annualized rate
of Two Hundred
Fifty Thousand Dollars
United States $250,000.00 per
annum, less
payroll deductions
and all required
withholdings.
Executive's
Base Salary
shall
be subject
to annual
review
and upward
adjustment
only
by
the Board of
Directors
of
the Company (the
" Board")
or a committee
thereof, beginning
in
fiscal 2017.
The Base Salary shall be paid
in accordance
with the
customary payroll
practices of the Company in
effect from time
to time.
The Executive's salary, as
adjusted from
time to
time under this
Section 3(a),
is
referred
to as
("Base
Salary").


 


(b)           
Annual Bonus. With respect
to each Company fiscal
year that
ends during the Term,
commencing with fiscal
year 2017, the
Executive shall be
eligible to receive an annual
performance-based
cash bonus
(the "Annual
Bonus")
which shall
be payable based upon
the attainment
of individual
and/or Company performance goals
established by the Board or
a committee thereof. The
target
amount of such
Annual Bonus
shall
equal
35% of Executive's
Base Salary
in the
year to
which
the Annual
Bonus relates,
provided
that the
actual amount of the Annual
Bonus may be greater
or less
than
such
target
amount (the "Target
Bonus").
Each Annual
Bonus,
if
any, for a
fiscal year
shall be payable, less
payroll deductions
and all required
withholdings, not later
than the fifteenth day
of the
third month following
the
end of such
year. Except as provided in
Section 7, notwithstanding any
other provision of
this Section
3(b), no bonus shall
be payable with
respect to
a Company fiscal
year
unless the Executive
remains continuously
employed
with the Company
until the
last
day of such
year.


 


(c)           
Reimbursement of
Expenses. The Company will
promptly reimburse
Executive
for all reasonable
out-of-pocket
business
expenses
that are
incurred
by
Executive
in furtherance of
the Company's
business
in accordance
with the
Company's
policies with
respect thereto
as in effect
from time
to time. The
Executive
shall
be reimbursed
by the Company
for the reasonable
attorneys
' fees
and costs incurred
by him
in connection
with the negotiation
and preparation of
this
Agreement
(and related
equity award
documentation),
up
to
a maximum
of $3,000
provided that
the Executive
shall
submit invoices to
the
Company within ninety
(90)
days of incurrence
of the expense, and the
Company shall
reimburse
Executive
within sixty (60) days
thereafter.




    	 	2	 



     


    

 


 


(d)           
Fringe Benefits. In
addition to
any benefits
provided
by
this
Agreement,
Executive
shall be entitled
to participate generally
in
all
employee benefit,
welfare
and other plans,
practices, policies
and programs
and fringe benefits
maintained by the Company
from time to time on
a basis no
less favorable
than those
provided
to other
similarly-situated
executives of
the Company. The
Executive understands that, except
when prohibited by applicable
law, the Company's
benefit plans
and fringe benefits
may be
amended, enlarged,
diminished or
terminated prospectively by
the Company
from time to time,
in its sole
discretion,
and that
such shall not
be deemed to be a breach
of
this Agreement.


 


(e)           
Vacation. Executive
shall be entitled to accrue four
(4) weeks
of paid vacation days
per
year in
accordance with and subject
to the terms of
the
Company '
s vacation policy
applicable to other executive
officers of the Company,
as it
may be amended prospectively
from  time to time.


 


Section
4. Insurance; Indemnification.


 


During
Executive'
s employment
with the
Company, the
Company shall maintain
the insurance it currently has
with respect
to (i) directors'
and officers' liability ,
(ii) errors
and omissions
and
(iii) general liability
insurance
providing
coverage
to
Executive
to
the same
extent as
other senior executives of the Company. Executive's
coverage under
such
insurance
shall terminate
upon Executive'
s leaving
of
the Company's employ for any
reason. The
Executive will be entitled
to indemnification with
respect to
Executive' s
services
provided
hereunder pursuant
to Nevada
law,
the terms and
conditions of Company's articles
of incorporation and/or
bylaws ,
Company's
directors
and officers
("D&O")
liability
insurance
policy,
and
Company 's
standard indemnification agreement
for directors
and officers
as
executed
by Company
and Executive.


 


Section
5. Equity Awards.


 


(a)           
Initial
Grant.
As incentive to
enter into and
undertake
employment
pursuant
to this Agreement,
the Company shall grant to Executive
on the
Effective Date a non-qualified
stock
option to
purchase
175,000
shares of
common stock
of the Company (the "Option")
under the Company's
Equity Incentive
Plan, effective
January 23, 2014
(the "Plan")
at an exercise
price equal
to
the fair
market
value
of the
Company's
common stock
on
the grant
date. The
Option shall vest one-third upon
the first
anniversary of the
Effective Date,
one-third upon
the second anniversary of the
Effective Date and one-third
upon the third anniversary
of the Effective
Date, provided the Executive
remains employed
with the Company
on the applicable
vesting date and
further provided that,
in the
event of a Change in
Control, as
defined in
the
Plan,
while Executive
is employed by the Company
any unvested portion
of
the
Option shall vest
immediately upon the Change in
Control. [Notwithstanding
the
foregoing in
no event
may (i) Executive
exercise
87,500
shares with respect
to the Option (the "
Unapproved Portion"
) prior to
the Company receiving
shareholder approval
of an increase
in the number of
shares of common stock authorized under
the Plan (or adoption of a new
plan covering the
Unapproved Portion)
which amendment to
the Plan
or adoption of
a new
plan shall
include provision for the issuance
of shares of common
stock underlying
the
Unapproved
Portion; and (ii) if
shareholder approval
is
not
obtained
for
any reason on or prior
to December 1,
2017, the Unapproved Portion
shall be
cancelled (from the unvested
portion of the
Option) and
of no further force
and effect.] The Option
shall be evidenced
in writing by, and
subject to the terms and
conditions of, the Plan and,
except
as otherwise
set forth herein,
the Company's
standard form of stock
option agreement,
which agreement shall expire
ten (10)
years from
the date of grant except as otherwise
provided herein,
in the stock
option
agreement or the Plan.


 




    	 	3	 



     


    

 


(b)          
Sale of Shares. Executive agrees that he will not
loan or pledge any securities
of the Company
owned by
him or
which he
may
accrue
in the
future
through Options or
other equity awards as
collateral for any indebtedness.


 


Section
6. Compliance with
Company Policy.


 


During
the Term, the Executive
shall observe all Company rules, regulations,
policies, procedures
and practices in effect
from time to time,
including, without limitation,
such
policies and procedures
as are contained in
the Company policy and procedures
manual, as may be amended
or superseded from time to time.


 


Section
7. Termination
of Employment.


 


Executive's
employment
with the
Company may
be
terminated
during Term 
of this
Agreement
for any of
the
following
reasons:


 


(a)           
By The
Company For Cause. At any time during the Term,
the
Company may terminate
Executive's employment
hereunder for Cause.
For purposes
of
this Agreement, "Cause"
shall mean the occurrence of any of the following events, as determined by
the Board or
a committee
designated by
the
Board, in
its sole
discretion: (i)
conduct by
Executive constituting
a material act
of willful misconduct in
connection with the performance
of his duties,
including,
without limitation,
misappropriation of funds or
property of the Company or any
of its
affiliates other than
the occasional, customary and
de minimis
use of
Company property for personal purposes; (ii) the
commission by Executive of a
felony or any misdemeanor involving moral turpitude, deceit,
dishonesty or fraud,
or conduct by Executive
that
would reasonably be expected to result
in material injury to the
Company if he
were retained in
his position;
(iii) continued, willful and deliberate
non-performance by Executive
of his
duties
hereunder
(other
than by
reason of Executive's physical
or
mental
illness,
incapacity
or
disability) which has
continued for more
than thirty (30)
days
following written notice of
such non-performance
from the
Company; (iv) a material
breach by
Executive of any of the
provisions
contained in Paragraph
7 of this Agreement; (v) a material
violation by
Executive of the
Company'
s
employment policies
which has continued for more than thirty (30) days
following written notice
of such violation
from the
Company; or (vi) willful
failure to cooperate with a bona
fide internal investigation or an investigation by
regulatory
or law
enforcement authorities,
after being
instructed
by
the
Company to
cooperate, or the
willful destruction
or
failure to
preserve documents or
other materials known
to
be
relevant to such investigation or
the willful inducement of
others to
fail to
cooperate
or to produce
documents
or other
materials.


 


		(b)	By
                                         The
                                         Company
                                         Without
                                         Cause.



 


At
any time during
the Term,
the Company
may terminate Executive's
employment hereunder without
Cause.


 


		(c)	By
                                         The
                                         Executive.



 


At
any
time
during
the
Term,
Executive may terminate
his employment
hereunder for any reason,
including but not
limited
to Good
Reason.
For purposes
of
this Agreement,
"Good
Reason"
shall mean
that Executive
has complied
with the "Good
Reason
Process"
(hereinafter
defined) following the occurrence
of any of the following
events: (i) a
substantial diminution or other
substantive adverse change, not
consented to
by Executive, in
the nature or scope of Executive'
s responsibilities,
authorities, powers, functions
or duties;
(ii) a
breach by the Company
of any of its other
material obligations under this
Agreement, including
but not limited to failure of
the
Company to
make any material payment or provide any
material benefit under this Agreement,
or (iii) a change in the geographic
location at
which
Executive must
perform his services as
provided under this
Agreement to a location more
than fifty miles from the location set
forth in this
Agreement; provided that, a change
in the employment
of Executive to another affiliate
of Company
does not
in and
of itself
constitute
" Good
Reason." "Good
Reason Process"
shall
mean that (A)
Executive reasonably
determines in good
faith
that a "Good
Reason"
event
has occurred; (B) Executive
notifies
the Company
in writing
of the occurrence
of
the Good
Reason
event within ninety
(90) days of
the occurrence of such event;
(C) Executive
cooperates in good faith with
the Company's efforts,
for a
period not less than sixty
(60) days following
such notice ,
to modify Executive'
s employment situation in
a manner acceptable to Executive
and Company; (D) notwithstanding
such efforts,
one or more
of the
Good Reason
events continues to exist and
has not been
modified in a
manner acceptable
to Executive;
and (E) Executive terminates his
employment no later
than sixty (60)
days after the end
of the
sixty (60) day
cure period.
If the
Company
cures the Good
Reason event
in a manner
acceptable to Executive
during
the sixty
(60) day
period, Good
Reason shall
be deemed not to have
occurred.


 




    	 	4	 



     


    

 


		(d)	Right
                                         to Severance.



 


In
the event the Company terminates
Executive's employment Without
Cause or
the Executive terminates employment
for Good
Reason as
provided in Section 7(c)
and if Executive executes
and does not revoke during any
applicable revocation
period a
general release of all claims against the
Company and
its affiliates in
a form
acceptable to the Company (a
" Release
of Claims")
within a
reasonable period of time specified
by the
Company and
in compliance with applicable
law,
following such
termination, then in addition
to any accrued
obligations payable
under Section 7(e)(i) below,
the Company 
shall:


 


(i)
Pay to the Executive one year
of Executive's Base Salary,
less payroll deductions and
all required withholdings, paid
over time
in accordance with the
Company's payroll
practices
then in effect;
and


 


(ii)  The Company
shall notify Executive of any
right to
continue group
health plan
coverage
sponsored by
the Company
immediately
prior to Executive
's
date
of termination
pursuant to the
provisions
of applicable law
including,
but not limited to,
the
provisions
of the Consolidated
Omnibus Budget
Reconciliation Act of
1985, as
amended ("COBRA").
If Executive
elects to receive such
continued healthcare coverage,
the
Company shall
directly
pay, or
reimburse
Executive for,
the premium
for Executive
and
Executive' s
covered
dependents, less the
amount
of Executive's monthly
premium contributions for
such coverage
prior to termination, for
the period commencing
on the first
day of the first full calendar
month following such
employment termination
through the earlier
of (i) the last day of the
month for twelve
(12) full calendar months (such
period consistent with
the severance
payment period set
forth in
Section 7(d)(i)
above)
following
the
date
the Release of
Claims becomes effective
and irrevocable;
and (ii)
the date Executive and Executive's
covered dependents,
if any,
become eligible for
healthcare coverage
under another employer's
plan(s). Executive
shall notify the Company
immediately if
Executive becomes
covered by a
group health
plan of
a subsequent
employer. After
the Company ceases to
pay premiums pursuant to this
subsection,


 


Executive
may,
if
eligible,
elect to continue
healthcare coverage
at Executive's
expense in accordance
the provisions of
COBRA or other
applicable
law.


 




    	 	5	 



     


    

 


For
purposes of
this Sect ion
7(d),
Executive's
termination of
employment at
the end of the
Term following an earlier notice
of nonrenewal by the Company
shall be
treated as a termination of the
Executive'
s employment
by the Company
without Cause
as of the
last
day of
the Term.


 


(e)           
Upon
a
termination
of the Executive's
employment
for
any
reason
,
(i)
the
Executive
shall
be entitled to
receive: (A) any
portion of
the
Executive's Base
Salary through
the date of
employment termination not theretofore
paid, (B) any
expenses owed to the
Executive under Section
3(c) above, (C) any accrued but unused
vacation pay
owed to
the Executive pursuant
to
Section
3(e) above,
and (D) any
amount arising
from the
Executive's
participation in,
or benefits
under, any
employee
benefit plans,
programs or
arrangements under
Section 3(e), which amounts shall
be payable
in accordance
with the terms
and conditions
of such
employee benefit plans, programs
or
arrangements.


 


(f)            
The payments and
benefits described
in this Section
7 shall be the
only payments and benefits
payable in
the event
of the Executive'
s termination
of employment
for any
reason.


 


Section
8. Survival of Obligations.


 


The
obligations of the Executive
as set
forth in Section
4,
Section
7 and Sections
9 through 1
7
below
shall
sur
vive
the
term of
this Agreement and
the
termination of
Executive
's
employment
hereunder regardless
of the reason(s)
therefor.


 


Section
9. Non-Competition and Conflicting
Employment.


 


(a)           
During the Term, the Executive
shall
not,
directly or
indirectly,
either as an Executive, employer,
employee, consultant, agent,
principal, partner,
officer,
director, shareholder, member,
investor or in any
other individual
or representative
capacity,
engage or participate in
any business or
business
related activity of any kind
that is in competition
in any
manner whatever
with the business
of the Company or any
business
activity related
to the
business in
which the Company
is
now
involved
or becomes
involved
during the Executive '
s employment.
For these
purposes,
the current
business of
the Company
is
described in the Company's
prospectus
dated November
1, 2016. The
Executive also agrees that,
during his
employment with
the Company, he
will not
engage in
any other
activities that
materially
conflict with his
obligations
to the Company,
it being
understood that
activities
approved by the Board under Section
2(b) or
otherwise in writing
shall
not be considered
to
violate
this
Section 
9(a).


 


(b)           
As a material
inducement to the Company
to continue
the employment
of the
Executive,
and
in order to
protect the Company'
s Confidential
In format ion
and
good will,
the
Executive agrees
that:


 


(i)           
For a period of twelve
(12) months following
termination of
the
Executive'
s employment
with the Company
or its
affiliates
for any
reason, Executive
will not
directly or indirectly
solicit
or divert
or accept business
relating
in any
manner
to Competing
Products or to
products, processes
or services
of the Company,
from any of the customers
or accounts of
the Company
with
which
the
Executive had any
contact
as a
result of Executive's
employment
with the
Company;
and




    	 	6	 



     


    

 


(c)           
For
a
period
of
twelve
( 12) months
after
termination
of
Executive's employment
with
the
Company
or its affiliates
for any reason,
Executive
will
not (A) render services
directly or indirectly
, as
an Executive, consultant
or otherwise, to any
Competing
Organization in connection
with
research on or
the acquisition,
development,
production,
distribution, marketing or providing
of
any Competing Product,
or
(B) own
any interest in
any Competing
Organization except
as
an
investor or
stockholder
of
more than 2% of the
equity securities
of any
entity:


 


(i)           
"Competing
Products"
means
any product,
process,
or
service of
any person
or organization
other than
the Company,
in existence
or under
development
(a) which is
identical to, substantially
the same
as, or an
adequate substitute
for any product, process or
service
of the Company
in existence
or under
development,
based on
any
patent or
patent application
(provisional
or otherwise),
or other
intellectual property of the
Company
about which
the
Executive
acquires
Confidential
Information,
and
(b) which
is
(or could
reasonably be anticipated
to
be) marketed
or distributed in such
a manner
and in such
a geographic
area
as to
actually
compete with such
product, process
or service
of
the
Company;
and


 


(ii)
"Competing
Organization "
means
any person
or organization,
including
the Executive,
engaged
in,
or about to
become engaged in,
research
on or the
acquisition,
development, production, distribution,
marketing or
providing
of a
Competing
Product.


 


(d)          
The
parties
agree
that
the
Company
is
entitled
to
protection
of its
interests
in
these areas.
The parties further agree
that the
limitations
as to
time,
geographical
area, and
scope of
activity
to
be restrained
do not impose
a greater
restraint upon
Executive than
is necessary to protect
the goodwill
or
other
business
interest of
the Company.
The parties
further agree that in the
event of a
violation of
this
Covenant Not To
Compete, that
the Company
shall
be entitled
to the
recovery of damages
from Executive
and
injunctive relief against
Executive
for
the
breach
or violation
or continued breach
or violation
of this Covenant.
The Executive agrees
that if
a court of competent
jurisdiction
determines that the
length of
time
or any
other restriction,
or portion
thereof, set
forth
in this
Section
9 is overly
restrictive
and unenforceable,
the court may
reduce
or modify
such
restrictions
to those
which
it deems
reasonable
and enforceable under
the circumstances, and
as so
reduced or
modified, the
parties
hereto
agree
that
the restrictions
of this Section 9
shall remain
in
full force
and effect. The
Executive further
agrees that
if a
court of competent
jurisdiction determines that
any
provision of this Section 9
is
invalid or
against
public policy, the
remaining
provisions of this
Section 9 and
the remainder of this
Agreement shall
not be affected
thereby, and
shall
remain in
full
force and
effect.


 


Section
10. Confidentiality.


 


(a)           
Executive recognizes and
acknowledges
that
he will have
access to
certain information
of
members
of
the
Company
and that
such
information
is confidential
and
constitutes
valuable,
special
and
unique property
of such members
of the
Company. The
parties agree
that the
Company
has
a legitimate
interest in
protecting
the Confidential
Information,
as defined
below. The parties
agree that
the Company
is
entitled to
protection
of its interests
in the
Confidential
Information.
The
Executive
shall
not at
any time,
either during
his
employment
and for seven
(7) years
after the
termination
of his employment
with the
Company for
any reason,
or indefinitely
to the
extent
the Confidential
Information
constitutes
a trade
secret under
applicable
law,
disclose
to others, use,
copy or
permit to
be
copied,
except
in pursuance
of
his
duties for
and on
behalf
of the
Company, its
successors,
assigns
or nominees,
any Confidential
Information
of any member
of the
Company (regardless
of whether
developed
by
the Executive)
without the
prior written
consent of the Company.
Executive
acknowledges that
the use or
disclosure of the Confidential Information
to anyone
or any third
party
could cause
monetary loss
and
damages to the Company
as well as
irreparable harm. The
parties
further agree that in
the event of
a violation of this
covenant against
non-use and non-disclosure
of Confidential
Information, that
the Company shall be
entitled to
a recovery of damages
from Executive and/or to
obtain an injunction
against Executive for the
breach or violation, continued
breach,
threatened breach
or violation of this
covenant.


 




    	 	7	 



     


    

 


(b)          
As used
herein, the term " Confidential
Information" with respect
to any person
means any secret
or confidential information
or know-how and shall
include, but
shall not be limited
to, plans,
financial and
operating information,
customers, supplier
arrangements, contracts, costs,
prices,
uses, and
applications of products
and services,
results of investigation
s, studies
or experiments owned or used
by such person,
and all apparatus, products,
processes,
compositions, samples, formulas,
computer programs, computer hardware
designs,
computer firmware designs,
and servicing, marketing
or manufacturing methods
and techniques
at any time
used, developed,
investigated,
made or
sold
by such
person, before or during
the term of this
Agreement, that are not readily
available to the public
or that are maintained
as confidential
by such
person. The
Executive shall
maintain in
confidence any Confidential Information
of third
parties received as a result
of his
employment with
the Company
in accordance with
the Company's
obligations to such
third parties
and
the policies established
by the
Company.


 


(c)           
As used herein , "Confidential
Information" with
respect to
the Company means any Company proprietary
information, technical data,
trade secrets, know-how
or other business
information disclosed to the
Executive by the
Company either directly
or indirectly
in writing, orally or by drawings
or inspection
or unintended view
of parts, equipment, data,
documents or the
like,
including, without
 limitation:


 


(i)
Medical and drug research
and testing results and information,
research and development techniques,
processes, methods, formulas,
trade secrets,
patents,
patent applications,
computer programs,
software, electronic codes,
mask works, inventions,
machine s, improvements,
data, formats, projects
and research
 projects;


 


(ii)
Information about costs, profits,
markets,
sales, pricing,
contracts and lists
of customers,
distributors and/or
vendors and business,
marketing and/or
strategic plans;


 


(iii)  Forecasts, unpublished
financial information, budgets,
projections, and customer identities,
characteristics and agreements
as well as all business opportunities,
conceived, designed, devised,
developed, perfected or made
by the Executive whether alone
or in conjunction
with others, and related in
any manner to the
actual
or
anticipated business
of
the Company or
to
actual
or anticipated areas of research
and development;
and


 


(iv)
Executive personnel
files and
compensation information.


 


(d)           
Notwithstanding the foregoing, Confidential Information
as defined
in Sections
1O(b)
and (c)
does not
include
any
of the foregoing
items
which
(i)
has become publicly
known or
made generally
available to the
public through
no wrongful
act of Executive;
(ii) has been disclosed to
Executive
by a
third party
having no duty to
keep Company matter confidential;
(iii)
has been developed by Executive independently
of employment
with the
company; (iv)
has been disclosed by the Company
to a
third party without
restriction
on disclosure;
(v) has
been
disclosed with the Company's
written consent,
or (vi) the Company's investors,
shareholder
s and
other capital sources.


 




    	 	8	 



     


    

 


(e)           
Executive
hereby
acknowledges
and agrees that
all
Confidential
Information shall
at
all
times
remain
the
property
of the Company.


 


(t)
Executive
agrees that
Executive will not
improperly use or disclose any
Confidential Information, proprietary
information
or trade secrets
of any former
employer
or
other person or entity
or entity with
which Executive
has an agreement or duty to
keep in confidence
information
acquired
by Executive
and that
Executive
will
not bring onto
Company
premises any unpublished
document or proprietary information belonging to
any such employer,
person
or entity
unless consented to in
writing by such
employer, person
or entity.


 


(g)          
Executive
recognizes that the
Company
has
received and
in the future will receive from
third pat1ies
their
confidential
or proprietary information subject
to a duty
on the
Company's part to
maintain the confidentiality
of such
information and
to use
it
only for
certain limited purposes.
Executive agrees to hold all
such confidential
or proprietary information in the
strictest
of confidence and not to
disclose
it to
any person,
firm or entity
or to use it except
as necessary in carrying out
Executive
's work
for the Company
consistent with Company
' s
agreement with such
third
party.


 


(h)          
Executive represents
and warrants that
from the
time of
the Executive's
first contact with the Company,
Executive has
held in
strict
confidence all Confidential Information
and has
not disclosed any
Confidential Information directly
or indirectly
to anyone outside the
Company, or used,
copied, published
or summarized
any Confidential Information,
except to
the extent otherwise
permitted
under the
terms of this
Agreement.


 


(i)           
Executive will
not disclose to the
Company or use on its
behalf any
confidential information belonging
to others and Executive
will not bring onto the premises
of the
Company any confidential
information belonging
to any such party unless consented
to in writing
by such
party.


 


Section
11. Inventions.


 


(a)           
Attached hereto
as Exhibit
A is
a list
describing
all ide
as, processes,
trademarks, service marks, inventions, designs, technologies,
computer
hardware or
software,
original works of
authorship, formulas, discoveries,
patents, copyrights, copyrightable
works, products, marketing
and business ideas,
and
all improvements,
know-how,
data rights, and
claims
related
to the foregoing,
whether or not
patentable, registrable or copyrightable,
which were conceived, developed or
created
by
Executive prior
to Executive's employment
or
first contact
with Company (collectively referred to
herein as
" Prior
Inventions"
), (A)
which belong
to
Executive, (B) which relate to
the
Company'
s current
or contemplated business,
products or
research
and development, and (C)
which are not
assigned to
the Company hereunder. If there
is
no Exhibit
A or no items
thereon, the
Executive represents
that there
are no
such Prior Inventions.
If in
the course
of Executive's employment
with
the Company, the Executive incorporates
or embodies into
a Company product,
service or process a Prior Invention
owned by
the Executive
or in
which the
Executive has
an
interest,
the
Company is
hereby granted
and shall
have a
non-exclusive, royalty free,
irrevocable, perpetual,
world-wide license
to make,
have made,
modify,
use and
sell such Prior
Invention
as part
of
or in
connection
with such product,
service
or process.




    	 	9	 



     


    

 


(b)           
Executive agrees that
Executive will
promptly make full, written disclosure
to the Company
and will hold
in trust for the sole
right and benefit of the Company,
and the Executive
hereby
assigns to the Company, or
its designee,
all of the
Executive'
s right,
title and
interest in and
to any and all ideas, process,
trademarks,
service
marks, inventions, designs, technologies,
computer hardware or software,
original works of authorship,
formulas, discoveries, patents
, copyrights,
copyrightable works, products,
marketing and
business ideas, and all improvements,
know-how, data, rights and claims related to the foregoing, whether
or not patentable, registrable
or copyrightable,
which Executive
may, on or after the Effective
Date of this Agreement, solely
or jointly
with others conceive
or develop or reduce
to
practice, or cause
to be
conceived or developed or
reduced to
practice, during
the period of time the Executive
is in the employ of the Company
(collectively referred
to
herein
as
"Intellectual
Property
Items");
and
the Executive further
agrees that the foregoing shall
also apply to
Intellectual Property Items which
relate to the business of the Company or to the Company's anticipated business
as of the end of the Executive's
employment and which are conceived,
developed or reduced to practice
during a period
of one year after the end of
such employment. Without limiting
the foregoing, the Executive
further acknowledges that all original works of authorship which are
made by Executive (solely
or jointly with others) within
the scope
of Executive
' employment
and which are protectable by copyright are works made for hire
as that term is
defined in the
United Stated Copyright 
Act.


 


(c)           
Executive agrees to keep
and maintain adequate
and current written records of
all Intellectual Property Items
made by Executive
(solely or jointly with
others) during the term
of Executive's employment with
the Company. The records will be in the
form of notes,
sketches,
drawings and any other format
that may
be specified by the
Company.
The records
will be available
to, and remain the
sole
property
of, the Company
at
all times.


 


Section
12. Return of Company
Property.


 


Executive
agrees that, at any time
upon request
of the
Company, and, in any event, at
the time
of leaving
the
Company's employ, Executive
will
deliver
to the Company
(and will not
keep originals
or copies in Executive's possession or
deliver them
to anyone
else)
any
and all devices,
records,
data, notes,
reports, proposals, lists,
correspondence, specifications,
drawings, blueprints, sketches,
material, equipment or other documents or property, or reproduction
of any of the aforementioned
items, containing
Confidential Information
or otherwise belonging
to the Company, its successors
or assigns, whether prepared by the Executive or supplied to the Executive by the Company. Notwithstanding the foregoing, it is
understood
that names
and contacts
in the
Executive's address book
acquired both
prior to
and during employment, including
shareholders
of the Company, will remain property
of the Executive
who will not be restricted from doing business with them
subject to
the limitations
Sections 10
and
14 hereof and applicable law.


 


Section
13. Non-Solicitation.


 


Executive
agrees that Executive shall not,
during Executive's
employment or other involvement
with
the Company and for
a period of
twelve (12)
months
immediately following
the
termination
of
the Executive ' s
employment with the Company,
for any reason, whether with
or without cause, (i) either
directly or indirectly
solicit
or take away, or attempt to
solicit
or take
away executives of the
Company, either for the
Executive's own business or
for any other person or entity
and/or (ii) either
directly or indirectly
recruit, solicit
or otherwise induce or influence
any investor, lessor,
supplier,
customer, agent,
representative or
any other
person which
has a business
relationship with the
Company to discontinue,
reduce or modify such employment,
agency or business relationship with the
Company.




    	 	10	 



     


    

 


Section
14. Publications.


 


Executive
agrees that Executive will,
in advance
of publication, provide
the Company with copies of all writings and materials
which Executive proposes to
publish during the term of Executive's
employment and for
twenty-four (24) months
thereafter. Executive
also agrees that
Executive will, at the
Company's request
and sole discretion,
cause to
be deleted from such writings
and materials any
information the Company
believes discloses or will
disclose Confidential
Information. The
Company' s
good faith judgment in these
matters will be
final. The Executive will also,
at the Company'
request and
in its sole
discretion, cause to be deleted
any reference whatsoever to
the Company from
such writings and 
materials.


 


Section
15. Equitable
Remedies.


 


Executive
agrees that any
damages awarded
the Company for any breach of
Sections 9 through 14
of
this Agreement
by
Executive
would be inadequate.
Accordingly, in
addition
to
any damages
and
other rights
or
remedies available
to the Company,
the Company
shall be entitled
to obtain injunctive relief from
a court of competent jurisdiction
temporarily,
preliminarily and permanently
restraining and enjoining any
such breach or threatened breach
and to
specific performance
of any such provision
of this
Agreement. In
the event that either party
commences litigation against
the other
under this Agreement the prevailing
party in said litigation
shall be entitled to
recover from the other all costs
and expenses incurred to
enforce the terms of this Agreement
and/or recover damages for
any breaches thereof,
including without limitation
reasonable attorneys'
fees.


 


Section
16. Representations and Warranties.


 


(a)           
Executive represents and
warrants as follows
that: (i)
Executive has
no obligations, legal or
otherwise, inconsistent
with the
terms of this
Agreement or with the
Executive's undertaking
a relationship with the Company;
and (ii) Executive has not
entered into, nor
will Executive enter into,
any agreement (whether
oral or written)
in
conflict
with this
Agreement.


 


(b)          
The Company represents
and warrants
to
the Executive that
this Agreement
and the
Options grant have
been duly authorized by
the Company's Board of Directors
and are the
valid and
binding
obligations
of the Company,
enforceable
in accordance
with their
respective terms.


 


Section
17. Miscellaneous.


 


(a)           
Entire Agreement. This
Agreement, the exhibits attached
hereto, and
the Options granted
concurrently herewith under Section
5(a) hereof, contain
the entire
understanding of
the parties
and
supersede all previous
contracts,
arrangements or understandings,
express
or implied,
between the Executive and the
Company with respect to the
subject matter hereof or
his engagement by the Company
as Chief Scientific Officer.
No agreements or
representations, oral or
otherwise,
express or implied,
with
respect to
the
subject matter hereof have
been made
by either party which
are not expressly set forth in
this Agreement
or
in
the attached
exhibits.


 


(b)           
Section
Headings.
The
section headings
herein
are for the
purpose
of
convenience only
and
are not
intended to define
or
limit
the contents of
any section.


 




    	 	11	 



     


    

 


(c)           
Severability. If any
provision of
this Agreement shall be declared
to be invalid
or unenforceable, in whole
or in part,
the remainder of this Agreement
shall be amended
to
provide the
parties with
the equivalent
of the same rights and obligations
as provided
in the original provisions
of this Agreement.


 


(d)           
No Oral
Modification; Waiver or
Discharge.
No
provisions
of
this Agreement may be
modified, waived or discharged
orally, but
only by
a waiver, modification
or discharge in writing
signed
by the Executive
and such officer as
may
be designated by
the
Board of Directors
of the Company
to execute
such
a waiver, modification
or discharge.
No waiver by
either party
hereto
at any time
of any breach
by the other party
hereto
of, or
failure to be
in compliance with, any condition
or provision
of
this Agreement
to
be performed by such
other party
shall
be deemed a
waiver of similar or dissimilar
provisions or conditions at
the
time or
at any
prior
or
subsequent time.


 


(e)           
Invalid Provisions.
Should any portion
of this
Agreement be adjudged or held
to be
invalid,
unenforceable
or
void, such holding
shall not
have
the
effect of invalidating
or
voiding the remainder
of this Agreement
and the parties
hereby agree
that the
portion so
held invalid,
unenforceable or void
shall, if
possible,
be deemed
amended
or reduced
in
scope, or otherwise be
stricken
from this Agreement to the
extent required for the
purposes
of
validity and enforcement


 


(f)            
Execution In
Counterparts.
The parties may sign this
Agreement in
counterparts, all
of which shall
be considered
one and the same
instrument. Facsimile transmissions,
or electronic
transmissions in
.pdf format, of
any
executed original document
and/or
retransmission of any
executed facsimile or .pdf transmission
shall be deemed
to be
the same as the delivery
of an
executed original of
this Agreement.


 


(g)           
Governing Law And
Performance.
This Agreement shall be
governed, construed, interpreted
and enforced in accordance
with the substantive
laws of
the Commonwealth
of Massachusetts, without giving effect to any choice of law
or conflict of
law provision
or rule
(whether of the
Commonwealth of Massachusetts
or any other jurisdiction)
that would cause the
application of the
law of any jurisdiction other
than the Commonwealth
of Massachusetts.
Any legal
action or
proceeding with respect to this
Agreement shall
be brought
in the courts of the
Commonwealth of Massachusetts
or of the
United States of
America for the
District of Massachusetts.
By execution
and delivery
of this
Agreement, each
of the parties hereto
accepts for
itself and
in
respect of
its
property,
generally and unconditionally,
the exclusive
jurisdiction
of the
aforesaid courts. ANY ACTION,
DEMAND, CLAIM,
OR COUNTERCLAIM ARISING UNDER OR
RELATING TO THIS AGREEMENT SHALL
BE RESOLVED BY A JUDGE
ALONE
AND EACH OF
COMPANY
AND EXECUTIVE
WAIVES ANY
RIGHT
TO A
JURY TRIAL
THEREOF.


 


(h)           
Successor and Assigns.
This Agreement
shall be binding on and inure to
the benefit of the
successors
in interest of
the parties, including ,
in the case
of the Executive,
the Executive's
heirs,
executors and estate.
The Executive
may
not assign
Executive's obligations under
this Agreement. Any successor to the
Company (whether direct or indirect
and whether by
purchase, merger,
consolidation,
liquidation or
otherwise) to all
or substantially all of the Company's business
and/or assets shall assume the
obligations under
this Agreement and agree expressly
to perform the obligations
under this
Agreement in
the same manner and to
the same extent
as the Company would be
required to perform such obligations
in the absence of a succession.
For all
purposes under this Agreement,
the term "Company"
shall include any successor
to the Company's
business and/or
assets which executes and delivers
the assumption agreement described
in this Section l 7(h) or which
becomes bound by the terms of
this Agreement by operation of  law.




    	 	12	 



     


    

 


(i)            
Notices. Any
notices or other communications
provided for hereunder may be
made by hand,
by certified
or registered
mail, postage prepaid, return
receipt
requested, or by nationally recognized
express courier services provided
that the same are addressed to
the party
required to be
notified
at its
address
first
written
above, or
such
other address as
may
hereafter
be established
by
a
party
by written notice
to the other
party. Notice shall
be considered
accomplished
on the date delivered, three
days after
being mailed or
one day after
deposit with
the express courier, as
applicable.


 


Section
18. Section 409A.


 


(a)           
It
is
intended
that any
compensation or
benefits under this
Agreement satisfy,
to
the greatest extent
possible, the exemptions from
the application of Section
409A of the
Internal Revenue Code of l986,
as
amended ("Section
409A")
provided under
Treasury Regulations Sections
l. 409A- l (b), and
this Agreement
will be
construed to
the greatest extent possible
as consistent with those
provisions, and
to
the extent not
so exempt,
this
Agreement (and any
definitions hereunder) will
be construed
in a manner that complies with
Section 409A. For purposes of
Section 409A,
the Executive's
right
to receive any
installment
payments under this
Agreement shall be
treated as a
right to receive
a series
of separate
payments and,
accordingly,
each installment payment hereunder
shall
at all
times
be considered
a separate and
distinct payment. Severance
benefits under Section 7(d) shall
not commence until the Executive
has a "
separation
from
service"
for purposes
of
Section 409A.


 


(b)          
To the
extent that any
reimbursement of expenses
or in-kind benefits constitutes
defe1Ted compensation
under Section 409A,
such
reimbursement or benefit shall
be provided no later
than December 31
of the
year following
the year
in which
the
expense was
incurred. The amount
of expenses reimbursed in one
year shall not affect
the amount eligible for reimbursement
in any subsequent year. The
amount of any in-kind benefits
provided in
one year shall not
affect the
amount of in-kind
benefits provided in any other
year.


 


(c)           
If the Executive
is deemed at
the time of
his
separation from service to be
a specified employee
for purposes
of Section
409A(a)(2)(B)(i) of the Code,
to the
extent delayed commencement
of any portion
of the compensation
and
benefits
to
which
the
Executive is
entitled
under this
Agreement is
required in
order to avoid a prohibited
distribution under
Section 409A(a)(2)(B)(i)
of the
Code, such
portion of the Executive '
s termination
benefits shall
be provided to the
Executive immediately after
the earlier
of (A) the expiration
of the six-month
period measured from the
date
of
the
Executive'
s separation
from service
with the Company
(as such term is defined in the
Treasury Regulations issued under
Section 409A
of the Code)
or (B) the date of
the Executive's death in
a lump
sum,
and any
remaining payments due under the Agreement
shall be paid
as otherwise
provided herein.


 


Section
19. Limitation
of Payments upon Certain
Events.


 


(a)          
Limitation on Payments. Notwithstanding
anything in this Agreement to
the contrary, if
any payment or distribution
Executive would
receive pursuant to this Agreement
or
otherwise
("Payment")
would
(a)
constitute
a
"
parachute
payment"
within
the
meaning
of
Section 280G
of the Code),
and
(b) but
for this
sentence, be
subject
to the excise
tax
imposed by Section 4999 of
the Code
(the "
Excise Tax"),
then
the Company
shall
cause to
be
determined, before
any amounts of the
Payment are paid
to Executive,
which
of the
following
alternative
forms of payment would
maximize Executive's
after-tax proceeds: (i) payment
in full of the entire
amount of
the Payment (a "
Full Payment"),
or (ii)
payment
of only a
part of the Payment so
that Executive receives
that largest Payment possible
without
being subject
to the
Excise Tax (a
" Reduced
Payment"),
whichever
of
the foregoing amounts,
taking into
account
the applicable federal,
state and local
income taxes and
the Excise Tax (all
computed at the highest marginal
rate, net of the maximum
reduction in federal
income taxes which
could be obtained
from a deduction of
such
state
and local
taxes),
results in
Executive's
receipt,
on an
after-tax basis, of the
greater amount of the
Payment, notwithstanding
that all or some portion
the Payment may
be subject
to the Excise Tax.


 




    	 	13	 



     


    

 


(b)          
The independent registered public
accounting firm engaged by
the Company for general
audit purposes
as of the
day prior to the date the first
Payment is due shall make
all
determinations required to
be made under this Section
19.
If the independent
registered
public accounting
firm so engaged
by
the Company
is
serving
as accountant or
auditor
for
the individual, group
or entity
effecting
the transaction, the
Company shall
appoint a nationally
recognized independent registered public
accounting
firm
to make
the determinations required hereunder. The
Company shall
bear all
expenses
with respect to
the determinations by such
independent registered public
accounting
firm required
to
be made
hereunder.


 


(c)          
The independent
registered public accounting
firm engaged
to make the determinations hereunder
shall
provide its
calculations, together
with detailed
supporting documentation,
to
the Company
and Executive
at such time as
requested
by the
Company
or Executive.
If the independent registered
public accounting firm determines that no
Excise Tax is
payable
with
respect to
a
Payment,
either before
or
after
the application
of
the Reduced Payment,
it shall
furnish the Company and Executive
with an
opinion reasonably acceptable
to Executive
that
no
Excise
Tax will be
imposed
with respect
to such
Payment. Any
good faith
determinations of the
accounting
firm made hereunder
shall be
final,
binding
and
conclusive upon
the Company and Executive.


 


IN
WITNESS WHEREOF,
the parties
hereto have
executed this Employment Agreement
under seal
as of the date
and year first above written.


 


	Company:

         

        Xenetic
        Biosciences, Inc.

         

         

        By:
        /s/ Scott Maguire

        Scott
        Maguire

        Chief
        Executive Officer
	Executive

         

         

         

         

        /s/
        Curtis Lockshin

        Curtis
        Lockshin



 








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